BUYERS GUIDE TO NYC REAL ESTATE

The following information is intended to educate you on the exciting and unique purchasing process in Manhattan. It is recommended that you choose a professional real estate Agent you feel comfortable working with and rely on their experience and knowledge in making the final decision to purchase your home.  We recommend our highly experienced and buyer friendly staff of real estate agents.

It is imperative to outline the different forms of ownership available to purchasers of Manhattan property. These include: Condominium, Cooperative, Cond-op, and Townhouse (both single and multi-family).

Preparation Work with your Green agent to complete the following:

•    Speak with a Mortgage Lender/Broker and obtain written pre-approval for a loan. Then proceed to a Mortgage Banker to be pre-qualified for a loan.  Though pre approval is a first step, pre qualification tells the seller just how much financing the bank is willing to front you if you are not making an all cash purchase (ACP).  It helps you determine your purchasing power and enables you to act expeditiously and with confidence when you identify the property you would like to purchase.

•    Choose a NYC Attorney who specializes in residential Real Estate.  Time is very crucial so be sure your attorney is available to move quickly as New York City has very complex real estate laws.  Attorneys must be utilized to close all real estate transactions.

•    At the start of a contract, the deposit upon executing a contract of sale historically is 20% of the purchase price. So be prepared to have those funds liquid when you begin your search. The balance of the down payment will be due upon closing unless you are making an ACP.

•    When Purchasing Coops, your total debt should not exceed 35-40% (except in the case of substantial liquid assets) and your total annual housing costs should not exceed 25-30% of your gross reported income. Housing costs include: coop maintenance, mortgage interest, secondary residences and any other mortgage in which your name appears.

•    Review your credit report periodically to remove all disputed claims.  Make a concerted effort to clear up any and all debt if possible, especially any outstanding credit card balances.

•    Be prepared to have your net worth statement with substantiating documentation (bank statements, brokerage statements & other financial documentation) available because, In certain forms of ownership, offers are not only accepted based upon price, but upon the financial strength of the potential buyer. In many cases sellers require you to provide this with your offer. Regardless of the outcome this information will be required for most purchases and financial institutions so having it prepared will also save you time in the future. Rest assured your green agent will safeguard this information in a confidential manner.
 

Guidelines to finding your home:

•    Define your search parameters. This typically includes but is not limited to price range, location, size, type of ownership and building amenities (if appropriate). The more flexible you are the better for you and all parties involved.

•    Choose an agent that you feel comfortable working with, one that understands what you are looking for and will dedicate quality time to finding your house. Because most agencies have virtually the same listing, you will be better served by using the services of a single broker.  This allows you to effectively schedule appointments to preview the properties that you are interested in. By having multiple brokers you duplicate the work and stand a chance of viewing the same property more than once. Since property in Manhattan tends to sell rather quickly, prolonging the process may actually hinder you from seeing the property that best meets your needs.

•    Lastly, by creating a good relationship with your broker, you are guaranteed to be the first notified the instance a new listing arrives with your specified criteria. Be specific about your needs, price point, locations of interest and any other amenities you require in your new home or building. If you do not feel comfortable with your broker, do not hesitate to let them know so that they may have the opportunity to refer you to a colleague with whom you may be more compatible.  Both parties are better served if you as the client are getting the maximum value for your money.  

•    Make yourself available to the broker on weekdays as well as weekends.  In addition to evenings, early morning and late afternoon are good times to schedule appointments, as brokers might be limited by management companies to viewing apartments during the week only. It is also good to avoid the masses that flock to the open houses (your competition) you get the full feel of the property when you have an exclusive viewing scheduled with your broker.
 

Once you identify the property - The purchase:

•    Submit a verbal offer through your Green Homes agent immediately who will follow it up in writing to the seller. The offer will include your purchase price, down payment, amount of financing, included and/or excluded personal property (i.e. window treatments, lighting fixtures, etc) preferred closing date, current income (combined for couples), job description, net worth, and debt status (loans, credit, etc.). Once your offer is verbally "accepted" by the seller, your broker will notify the seller's attorney who in turn will draw up and send to your attorney the initial contract.

•    Please note that although your offer has been presented, the sellers are at liberty to entertain and accept ALL subsequent offers put forth by other prospective buyers until your contract is negotiated or finalized, up to the point of a fully signed, executed and returned contract. This means that until both the buyer and seller sign your contract, your deal may not be viewed as the primary deal.  This is why you should instruct your real estate attorney to expedite the process.

•    Your attorney must then review with you the contract and explain all terms.  Then, “Due Diligence” must be done to review the “Financial” ramification of purchasing said property, as well as any other issues or concerns you might have about the building.  Once all terms are clear, you will be asked to execute the contract and put forth a 10% deposit which will be held in escrow until the closing of the deal.  Once this is done, the seller, in turn, signs the contract and your attorney then delivers one original copy of the contract to you and the other copy to your mortgage broker/banker.

•    If you need financing and you have not already done so, apply for a mortgage forth with. Once this has been done, your broker will liaise with your mortgage broker/bank to provide the bank with the requested pertinent information as well as coordinate an appraisal of the property. The loan process takes approximately 45 days to complete (depending on how much required financial data you have handed to your broker and banker).

•    While awaiting your mortgage commitment work with your broker to complete your board package (not applicable for townhouse purchases). Your broker will provide an application which varies from building to building which typically must be completed and returned to your broker (who will in turn deliver it to the appropriate party) within 10 days of receipt of the fully executed contract or 3 days for the date a bank commitment letter is received, whichever applies. A typical cooperative board package requires at the minimum, the following: Personal and Business Reference Letters (if necessary, we can provide you with sample reference letters to assist your friends and colleagues), Employment Verification Letters and/or Pay Stubs, Bank Verification and Brokerage Statements, Net Worth Statement (this mirrors the information requested by your bank), two-years tax returns and the mortgage loan application and commitment.

•    You must comply with and submit all requests for documentation as this eases the process.  Please do not take the board packages for granted.  You must type and package both the application form and the Net worth Statement in a clear and concise assessment of your qualifications to purchase.  Once you have completed this task, your broker will send over all required documentation to the board in the manner they were requested

•    Once completed, your broker will review the package in order to assure that all required documentation has been supplied and presented in the manner requested by the board and then forward the package to the buildings managing agent or otherwise authorized personnel for processing.

•    Once your board package is reviewed, an interview will be scheduled for you to meet with the board.  The manner in which boards meet with applicants vary, so be sure to ask your broker how often the board meets, or if thy have a separate interview committee.

•    Generally, notifications are made about 72 hours after the interview.  The board, however, reserves the right to take longer if the need arises.  The decision will be given directly to you or to your agent.  If approved, you must notify your attorney forth with so a closing date is set.  Typically, closings can take up to 14 days to schedule so please keep that in mind when deciding a move in date.

The Closing:

•    Once the apartment has been vacated by the seller or current inhabitant, you will be accompanied by your agent on an appointment to inspect the property in order to verify that it is in the same condition as was stated in the contract

•    At all closings, do not fail to bring appropriate forms of identification like your driver's license or passport.  Also, do not forget to bring your checkbook with you for any last minute adjustments, and all certified checks or monies discussed with your attorney.

•    Condominiums & Townhouses: The closing is ordinarily held at the office of the seller or lender's attorney. The parties in attendance include you, the seller, the lender’s attorney, your attorney, the seller’s attorney, the real estate agents involved in the transaction, and the title company closer.  The first order of the day is to sign all documents necessary to complete the loan transaction inclusive of a mortgage and promissory note. Once that is done, you will then sign all documents to convey the condo apartment to you including a Deed, Title Report, and Unit Power of Attorney. Checks representing the balance of the purchase price and adjustments are exchanged for the keys to the apartment or house.

•    Cooperatives and Cond-ops: The closing is ordinarily held at the office of the management company for the building. The parties in attendance include you, the seller, your attorney, the seller’s attorney, the lenders attorney, a representative from the managements transfer dept., and the Agent(s) involved in the transaction.  At closing, all documents needed to complete the loan transaction will be signed first, which include,  a Promissory Note, a Security Agreement, an Assignment of Lease, and Stock Power. Thereafter, you will sign all documents to convey the apartment and secure interest in the apartment such as Stock Certificate, Proprietary Lease and Consent and Checks representing the balance of the purchase price and adjustments are exchanged for the keys to the apartment